In final offer arbitration the decision of the arbitrator provides the parties
with information about the preferences of the arbitrator that were not
available prior to the award. A union (employer) victory tells the parties
the fair wage belief of the arbitrator lies above (below) the mean of the
parties’ final offers. With inter-arbitrator reliability and temporal
stability in the characteristics of the bargaining pair, the award will alter
the parties’ expectations about the preferences of an arbitrator in the next
bargaining round and change negotiated settlements. The evidence from
Wisconsin teacher and school board negotiations supports this hypothesis. The
change in the negotiated wage increase from the round prior to an award to the
round after an award is about 2 percentage points greater when the union's
final offer is chosen than when the employer's offer is selected. In the
round following arbitration the variance in negotiated settlements also
declines and the structure of negotiated settlements converges to the
estimated structure of arbitrator beliefs.

Recent studies have investigated arbitrator decision rules in both
experimental and field settings. The external validity of experimental
studies is evaluated by comparing the decisions made in an experiment with
those made in actual cases for a common group of arbitrators. The results
show the decision models used in the two settings are very similar when the
decision problem in the two settings is carefully controlled to be the same.

Most research on arbitrator decision-making has used a model that assumes
there is only one disputed issue. This study shows this model is not
appropriate in multi—issue disputes under a final—offer by package law. Using
data from Wisconsin, I find arbitrators do give substantial weight to non-wage
issues in multi-issue disputes. However, the written awards of arbitrators
substantially understate the weight given to non-wage issues in the final
offer selection.

This paper investigates the impact of plant closings and permanent layoffs on the
group health insurance coverage for a random sample of workers displaced from
1979-1988. Using data from the 198A, 1986 and 1988 CPS Displaced Worker Surveys
and the March 1989 CPS, I find displaced workers that were re—employed at the
time of the surveys were significantly less likely to have health insurance on
their new job. For all married displaced workers I estimate the overall
probability of HI coverage declined l9 percentage points from .88 to .69. The
probability a married white male lggg health insurance after displacement was
.20. For single displaced workers the probability of health insurance coverage
declined 25 percent from .64 to .48. Single white male workers that had HI
benefits on their displaced job had a .38 probability of losing these benefits
after displacement. Comparable effects were found for females. Less educated
workers and minorities were more likely to lose coverage than white and college
educated workers. I find no evidence that workers who lost health insurance
benefits received higher wages on their new jobs to compensate for the loss. In
fact, a displaced worker that lost health benefits suffered a greater wage loss
than a comparable worker who gained health benefits.

We study strike durations and outcomes for some 2000 disputes that occurred
between 1881 and 1886. Most post-strike bargaining settlements in the 1880s fell
into one of two categories: either a union "victory", characterized by a
significant wage gain or hours cut, or a union "defeat", characterized by the
resumption of work at the previous terms of employment. We find a strong
negative relation between strike duration and the value of the settlement to
workers, reflecting the declining probability of a union victory among longer
strikes. For the subset of strikes over wage increases we estimate a structural
model that includes equations for the capitulation times of the two parties and
a specification of the wage increase conditional on a union victory. We find
strong support for a relative bargaining power hypothesis: factors that enhance
the workers’ ability to withstand a strike tend to raise the wage increase in the
event of a successful strike, while factors that enhance the employer's ability
to withstand a strike tend to lower the wage increase in the event of a union
victory.